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China orders banks to stop doing business with North Korea

China orders banks to stop doing business with North Korea
China’s central bank has told banks to strictly implement United Nations sanctions against North Korea, amid US concerns that Beijing has not been tough enough over Pyongyang’s repeated nuclear tests, four sources told Reuters on Thursday.

Tensions between the United States and North Korea have ratcheted up after the sixth and most powerful nuclear test conducted by Pyongyang on Sept. 3 prompted the United Nations Security Council to impose further sanctions last week.

Chinese banks have come under scrutiny for their role as a conduit for funds flowing to and from China’s increasingly isolated neighbor.

The sources said banks were told to stop providing financial services to new North Korean customers and to wind down loans with existing customers, following tighter sanctions against Pyongyang by the United Nations.

The sources said lenders were asked to fully implement United Nations sanctions against North Korea and were warned of the economic losses and reputational risks if they did not do so.

Chinese banks received the document on Monday, the sources said.

China’s central bank did not immediately respond to a request for comment.

“At present, management of North Korea-related business has become an issue of national-level politics and national security,” according to the document seen by the sources.

The document directed banks to explain to any North Korean customers that “our bank is fulfilling our international obligations and implementing United Nations sanctions against North Korea. As such, we refuse to handle any individual loans connected to North Korea.”

The document did not specify whether existing North Korean account holders could still deposit or remove money from their accounts.

Frustrated that China had not done more to rein in North Korea, the US Trump administration considered new sanctions in July on small Chinese banks and other firms doing business with Pyongyang, two senior US officials said.

China’s Big Four state-owned banks have stopped providing financial services to new North Korean clients, with some measures beginning as early as the end of last year.
Last Modified: Thursday، 21 September 2017 09:10 PM
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